Answer :
Sales in dollars | $4,51,500 |
Sales volume in units | 9,030 units |
Explanation:
Given
fixed cost = $78,965 ,
variable cost = $34.5 per unit,
sales per unit = $50 per unit
Therefore
Contribution per unit = sales per unit - variable cost per unit
= $ 50 - $34.5 = $15.5 per unit
Contribution margin = contribution per unit ÷ sales per unit
= $15.5 ÷ $50
= 0.31
= 31%
1) sales in dollars when desired profit $61,000
= (Fixed cost + desired profit) ÷ contribution margin
= ($78,965 + $61,000) ÷ 31%
= $1,39,965 ÷ 31%
= $4,51,500
2) sales volume in units when desired profit $61,000
= (Fixed cost + desired profit) ÷ contribution per unit
= $1,39,965 ÷ $15.5
= 9,030 units
Thornton Company incurs annual fixed costs of $78,965. Variable costs for Thornton's product are $34.50 per...
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